Nintendo Co said full-year profit fell by about 38 percent and sales of its GameCube console lagged forecasts by about half, handing Microsoft Corp the title of the world's No. 2 maker of video-game machines.
Kyoto-based Nintendo, until this year second only to Sony Corp in console sales, said it sold about 5.6 million GameCubes in the fiscal year ended March 31, 44 percent short of its 10 million unit goal. Microsoft expects to sell 9 million of its Xbox game machines in the fiscal year ending June 30.
The weaker-than-expected GameCube sales at Nintendo, whose shares have fallen 52 percent the past year, may increase pressure on the company to follow in the path of rival Sega Corp, which scrapped its Dreamcast game console when sales flopped. The poor sales may also force software designers to abandon the machine in favor of Sony's PlayStation 2 or Microsoft's Xbox.
"Lower-than-expected GameCube sales mean Nintendo has failed to grab users in the higher age bracket" said Soichiro Fukuda, an analyst with Nikko Citigroup Ltd. "The company has to solidify its hold on younger players by developing games that link their Game Boy Advance hand-held player with the GameCube."
Nintendo's release of figures on GameCube sales coincided with the company's announcement that group net income fell to about ?66 billion (US$547 million) in the 12 months ended March 31, down from 106.4 billion yen in the year-ago period. Nintendo had expected net income of ?80 billion.
Full-year sales fell by about a 10th to ?500 billion, lagging Nintendo's forecast by about 17 percent, the company said in a statement to the Osaka Stock Exchange.
For the year ended March 31, Nintendo will book a 23 billion yen charge related to foreign exchange losses, it said.
GameCube sales lagged the Xbox in North America and Europe while they outpaced the Microsoft machine in Japan, Mori said. Nintendo blamed the shortfall on disappointing GameCube software sales and the popularity of rival titles such as the Grand Theft Auto series for Sony's PlayStation 2.
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